Circular No. 59/TC/TCNH guides commercial banks in providing interest rate subsidies when lending to policy-targeted households and poor households in the Mekong Delta region for raising ground levels or constructing floors on piles in accordance with Decision No. 256/TTg of the Prime Minister.
Scope of application
Commercial banks designated by the State Bank of Vietnam shall provide loans to policy-targeted households and poor households in the Mekong Delta region for raising ground levels or constructing floors on piles.
Key points
- Commercial banks shall be compensated for the difference between medium- and long-term standard interest rates and the designated loan interest rate at 0.7% per month.
- The amount of interest rate subsidy compensation is calculated annually based on the average monthly loan balance of commercial banks.
- Commercial banks must prepare plans to request interest rate subsidies and submit them to the Ministry of Finance according to the annual state budget planning process.
- The Ministry of Finance will review, consolidate, and notify the plan targets for interest rate subsidies to commercial banks.
- Quarterly, the Ministry of Finance will temporarily provide interest rate subsidies to commercial banks based on the plan targets.
🌐 Social impact of this document
- To reduce the financial burden on policy-targeted households and poor households in the Mekong Delta region when borrowing for raising ground levels or constructing floors.
- To facilitate commercial banks in implementing preferential interest rate loans.
❓ Frequently asked questions
How are commercial banks compensated for the interest rate difference?
The amount of interest rate subsidy compensation is calculated based on the average monthly loan balance of commercial banks and reviewed and approved according to the annual state budget planning process.
What actions should banks take to request interest rate subsidies?
Banks must prepare loan plans and estimate the resulting interest rate differences, then report these to the Ministry of Finance as required.
Full text
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MINISTRY OF FINANCE |
SOCIALIST REPUBLIC OF VIETNAM |
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NUMBER: 59/TC/TCNH |
Hanoi, September 27, 1996 |
CIRCULAR
OF THE MINISTRY OF FINANCE NUMBER 59 TC/TCNH ON SEPTEMBER 27, 1996 GUIDING THE SUBSIDY OF INTEREST RATE DIFFERENTIAL FOR LOANS TO HOUSEHOLDS IN THE MISSIONARY POLICY CATEGORY AND POOR HOUSEHOLDS IN THE MEKONG DELTA REGION FOR RAISING THE FOUNDATION OR BUILDING FLOORS ON PILES
To implement Decision No. 256/TTg dated April 24, 1996 of the Prime Minister regarding loans to households in the missionary policy category and poor households in the Mekong Delta region for raising the foundation or building floors on piles, after exchanging and reaching consensus with the State Bank and the Ministry of Planning and Investment, the Ministry of Finance guides the mechanism for subsidizing interest rate differential for Commercial Banks (CBs) designated to carry out the loan tasks according to the above Decision as follows:
I. OBJECTS AND PRINCIPLES OF SUBSIDY OF INTEREST RATE DIFFERENTIAL
1. The unit eligible for subsidy of interest rate differential under this Circular is the CBs designated by the State Bank (SBV) to provide loans to households in the missionary policy category and poor households in the Mekong Delta region for raising the foundation or building floors on piles according to Decision No. 256/TTg dated April 24, 1996 of the Prime Minister.
2. Subsidies of interest rate differential will only be provided based on the actual amount of loans made by CBs, ensuring all conditions for lending purposes, correct target groups, within the time limit, at the specified interest rate, and within the plan index assigned according to Decision No. 256/TTg of the Prime Minister and Circular guiding implementation No. 04/TT-NH14 dated May 16, 1996 of the State Bank.
3. The amount of interest rate differential subsidy is determined based on the principle of compensating the difference between the medium and long-term interest rates of banks for ordinary loans and the interest rate for designated loans at 0.7% per month on the loan amount eligible for subsidy as stipulated in Point 2 above.
II. METHODS FOR CALCULATING AND DETERMINING THE AMOUNT OF INTEREST RATE DIFFERENTIAL SUBSIDY
1. The amount of interest rate differential subsidy is calculated and determined annually according to the following formula:
Subsidy Amount = Loan Amount Eligible for Subsidy x Average Interest Rate for Ordinary Loans - Designated Loan Interest Rate x Loan Amount Eligible for Subsidy
make up for = borrow x typically - borrow only x allowed to be granted
year grant medium and long-term make up for
make up month limit month month year
a) The loan amount eligible for monthly subsidy calculation is the average monthly balance of the loan amount eligible for subsidy as stipulated in Point 2 of Section I above.
b) The average monthly interest rate for ordinary medium and long-term loans is the actual interest rate charged by the bank within the range prescribed by the State Bank.
III. METHODS FOR SUBSIDY OF INTEREST RATE DIFFERENTIAL
1. CBs designated for lending are responsible for accounting and tracking separately on a dedicated account the loan amounts and collections from households in the missionary policy category and poor households in the Mekong Delta region who borrow for raising the foundation or building floors on piles.
2. Based on the annual loan capital demand plans of the Ministry of Agriculture and Rural Development and the People's Committees of provinces in the Mekong Delta, CBs designated for lending must prepare annual subsidy request plans divided by quarter (according to the attached form) and submit them to the Ministry of Finance according to the annual state budget planning process.
3. The Ministry of Finance will review and consolidate the subsidy plan into the annual state budget plan and notify CBs of the annual and quarterly subsidy plan indices after the annual state budget plan has been approved by the National Assembly.
4. Quarterly, the Ministry of Finance will temporarily subsidize the interest rate differential according to the plan index for CBs.
5. At the end of the fiscal year, CBs designated for lending are responsible for calculating and preparing a report on the interest rate differential requesting subsidy (according to the attached form) to send to the Ministry of Finance.
The Ministry of Finance will inspect, officially approve the annual interest rate differential subsidy amount for CBs and handle the subsidy.
The subsidy amount will be recorded in the income account of the Central Bank and considered as income from credit activities of the subsidized bank.
IV- IMPLEMENTATION
1. Based on Decision No. 256/TTg dated April 24, 1996 of the Prime Minister and the guidance in this Circular, the General Director of the designated commercial bank is responsible for organizing and implementing the preparation of plans and accurately reporting data for subsidy requests. During the implementation process, if there are difficulties, they should reflect them to the Ministry of Finance for timely consideration and resolution.
2. Provincial finance and price bureaus in the Mekong Delta have the responsibility to assist provincial people's committees in coordinating with relevant agencies and branches of designated commercial banks in the preparation of loan capital demand plans and monitoring their implementation locally, while reflecting issues that need resolution to the Ministry of Finance.
3. It is requested that the State Bank cooperate with the Ministry of Finance in directing and inspecting the implementation of this Circular.
Relevant units under the Ministry of Finance: General Department of Taxation, General Department of State Capital and Asset Management at Enterprises, according to their functions, guide and inspect the implementation of this Circular.
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Pham Van Trong (Signed) |
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Name of Unit:... Number:... |
SOCIALIST REPUBLIC OF VIETNAM HANOI, DAY... MONTH... YEAR 199... |
REGARDING THE PLAN FOR SUBSIDY OF INTEREST RATE DIFFERENTIAL
for loans according to Decision 256/TTg
Respectfully submitted to: Ministry of Finance
Based on the loan plan for households in the missionary policy category and poor households in the Mekong Delta region for raising the foundation or building floors on piles according to Decision No. 256/TTg dated April 24, 1996 of the Prime Minister, the Bank... reports on the plan for subsidy of interest rate differential for the year..., specifically as follows:
1. Loan Plan for the Year
- Beginning-of-year loan balance:...
- Additional loan plan for the year:...
- Debt recovery plan for the year:...
- End-of-year loan balance:...
- Annual average loan balance:...
2. Expected Interest Rate Differential to Arise in the Year
- Average annual interest rate for ordinary loans:...
- Expected interest rate differential (ordinary loan interest rate minus designated loan interest rate):...
- Expected interest rate differential arising in the year proposed for subsidy (with detailed calculation tables attached)
3. Request the Ministry of Finance to subsidize the expected interest rate differential arising in the year with the amount of:
- Quarter I:...
- Quarter II:...
- Quarter III:...
- Quarter IV:...
Request the Ministry of Finance to consider and approve the plan for subsidizing the interest rate differential above for the unit.
General Director of the Bank...
Name of Unit:... SOCIALIST REPUBLIC OF VIET NAM
Number:... Independence - Freedom - Happiness
(Signature, stamp)
of interest rate differential Hanoi, day... month... year 199
interest rate difference Hanoi, day... month... year 199
for loans according to Decision 256/TTg
Respectfully submitted to: Ministry of Finance
BASED ON THE RESULTS OF LOANS TO HOUSEHOLDS UNDER POLICY AND POOR HOUSEHOLDS IN THE MEKONG DELTA FOR FOUNDATION LAYING OR FLOOR INSTALLATION ON PILES ACCORDING TO DECISION NO. 256/TTg DATED APRIL 24, 1996 OF THE PRIME MINISTER, BANK... REQUESTS TO REPORT AND PROPOSE INTEREST RATE DIFFERENCE SUBSIDY FOR THE YEAR... FOR THE UNIT, SPECIFICALLY AS FOLLOWS:
1/ IMPLEMENTATION IN THE YEAR
- Beginning-of-year loan balance:...
- ADDITIONAL LOAN CAPITAL INCREASED IN THE YEAR:...
- CAPITAL RECOVERED FROM DEBT IN THE YEAR:...
- End-of-year loan balance:...
- Annual average loan balance:...
2/ INTEREST RATE DIFFERENCE GENERATED IN THE YEAR
- Average annual interest rate for ordinary loans:...
- ACTUAL INTEREST RATE DIFFERENCE IN THE YEAR:…
- ACTUAL INTEREST RATE DIFFERENCE GENERATED IN THE YEAR PROPOSED FOR SUBSIDY:…
(ATTACHED IS A DETAIL CALCULATION TABLE)
3/ PROPOSAL TO THE MINISTRY OF FINANCE: SUBSIDIZE THE INTEREST RATE DIFFERENCE GENERATED IN THE YEAR WITH THE AMOUNT OF:
4/ AMOUNT ALREADY SUBSIDIZED ACCORDING TO THE PLAN IN THE YEAR:…
- FIRST QUARTER…
- SECOND QUARTER…
- THIRD QUARTER…
- FOURTH QUARTER…
5/ AMOUNT PROPOSED FOR ADDITIONAL SUBSIDIZATION:…
REQUEST THE MINISTRY OF FINANCE TO CONSIDER TEMPORARILY SUBSIDIZE THE INTEREST RATE DIFFERENCE ABOVE FOR THE UNIT.
BANK...
COMBINED REPORT ON INTEREST RATE DIFFERENCE PROPOSING SUBSIDY
Number:... Independence - Freedom - Happiness
(Signature, stamp)
IMPLEMENTED
1- YEAR-BEGINNING BALANCE OF LOANS (DETAIL BY PROVINCE)
Start date of lease (day/month/year)
Unit: VND
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Index |
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2- YEAR-END BALANCE OF LOANS (DETAIL BY PROVINCE) |
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and Investment: |
currently |
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3- YEAR-AVERAGE BALANCE OF LOANS (DETAIL BY PROVINCE) |
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4- PROJECTED YEAR-AVERAGE REGULAR LOAN INTEREST RATE (DETAIL BY PROVINCE) |
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5- PROJECTED INTEREST RATE DIFFERENCE (REGULAR LOAN INTEREST RATE MINUS DESIGNATED LOAN INTEREST RATE) (DETAIL BY PROVINCE) |
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6- PROJECTED INTEREST RATE DIFFERENCE FOR SUBSIDY IN THE YEAR (DETAIL BY PROVINCE) |
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HEAD OF ACCOUNTING DEPARTMENT STATE OWNED COMMERCIAL BANK HEAD OF STATE OWNED COMMERCIAL BANK |
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6- Interest rate difference expected request grant make up for in year (Details by each Province) |
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Date…month…year
Chief Accountant Commercial Bank Head Commercial Bank
SECURITY PERSONNEL
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HANOI, DAY... MONTH... YEAR 199...
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